Tuesday, Feb. 3


City renegotiates costs of sewage treatment plant operation     Send a link to a friend

[FEB. 3, 2004]  Recent expansion of operations at the city wastewater treatment plant prompted the managing company, Environmental Management Corporation, to the bargaining table. The company currently handles all expenses and pays the bills for the operation. Since there are more generators and equipment and more power is needed to run them, more supplies and materials are needed, and expenses are greater than they were before the upgrade was completed.

The company has been monitoring the cost increases since December, when the upgrades went fully online, and now has some new cost averages.

The new plant doubles the processing capacity. The upgrade and expansion was a necessity, as the treatment system was at full capacity with no room for the community to add any housing, business or industrial growth to the system.

Neither could the old operation adequately remove ammonia to meet stricter Illinois Environmental Protection Agency standards. ["Groundbreaking marks start of $9.8 million sewer plant upgrade," posted Nov. 2, 2002, in Lincoln Daily News]

The company offered two proposals, with charts detailing the increases in operating costs, for the sewer and drainage committee to consider last Tuesday. The committee, headed by Benny Huskins, reconvened on Monday night to hammer out the details.

Under the current plan, Environmental Management Corporation pays all expenses to run the wastewater treatment plant. This includes paying all the utility bills.

In the proposals were options that included an electrical cap of $37,100 and a risk benefit at $35,000 to protect the city from utility cost increases.

A risk benefit was offered as an incentive to cover for unpredictable electrical cost increases. It offered up to $120,000 dollars in coverage, with a clause that says the city gets as much as 75 percent of the $35,000 back if it is unused. The total possible savings is near $100,000.

As a separate factor, company representative Joseph Miller said that when EMC pays the electrical bill they are subject to taxation. However, if the city wants to take over paying that bill, as a tax-exempt entity they would currently save $14,000 to $16,000 annually in taxes.


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After discussing the history of electrical increases over the last 10 years, the city unanimously decided on the option in which they will take their own risks in utility and operational cost increases ($35,000) and pay their own electric bill ($16,000), for a possible savings of $51,000 per year.

A new agreement will be drawn up and fees will be calculated retroactive from the Dec. 1, 2003, renewal date.

The yearly operations and maintenance fees and expenses from the option chosen, without the risk benefit and with the city paying the electricity bill, are as follows:

Revised operations and maintenance fees

Revised operating cost, $1,068,148

Gas rate increase, $7,000

Consumer Price Index -- eight months, $26,589

Electrical cap, $37,100

Total: $1,138,837

Breakdown of operations and maintenance expenses

Gas, $15,000

Polymer, $45,000

Sludge, $25,000

Water, $12,000

Generator fuel, $37,000

Business insurance, $15,000

Payroll and benefits, $33,000          

Telephone, $5,000

Margin, $33,000

Total: $220,000

[Jan Youngquist]

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